In late June, Livonia-based automotive fastener supplier AlphaUSA sent a shipment of steel to its joint venture in Mexico. Unable to source steel nearby in Mexico and with a shipment deadline fast approaching, the supplier decided to buy steel in the U.S. and send it across the border.

Unfortunately, the shipment didn't cross the U.S. southern border until after July 1 — when Mexico slapped a retaliatory tariff on $3 billion worth of U.S. products, including steel. Alpha's shipment was hit with Mexico's traditional 16 percent value-added tax, plus an additional 15 percent tariff, costing the supplier thousands of dollars more.

"We had no choice; we had a contractual customer demand," said David Lawrence, vice president and chief administrative officer for Alpha. "We absorbed the additional cost, and we're absorbing all the costs for these tariffs, and it's just not sustainable."

For years, Alpha resisted the idea to expand into Mexico because of the substantial investment. A customer had demanded it put a plant there. Now the family-owned supplier is being hit by tariffs in both nations and Lawrence says the vast majority of its products, mostly made high-volume, low-margin steel fasteners, are unprofitable.

Alpha is just one victim in the Trump administration's growing global trade war designed to boost American manufacturing — one that is set to leave a trail of unrealized profits in its path, according to experts.

In its latest move, the White House is reportedly seeking to clamp down further on foreign imports, this time planning $200 billion in tariffs on Chinese goods like routers, furniture and handbags, stoking more fear among Michigan businesses already impacted by previous U.S. tariffs and retaliatory foreign tariffs. The list of U.S. tariffs has grown from 18 to more than 10,000, if the U.S. moves forward with the new China tariff threat.

The rat-a-tat drumbeat of tariff news — and the unpredictability of where it will all end — are crippling local businesses' ability to create strategic plans to handle rising costs, said Daron Gifford, partner and consulting services leader at Plante Moran in Auburn Hills.

"Frankly, many (businesses) are having a hard time starting the evaluation process," Gifford said. "The biggest challenge is there are new tariffs seemingly every day. Whether a company needs to re-source materials, change manufacturing strategy or find alternative sourcing, (those) are long-term initiatives they can't get started on."

Mary Buchzeiger, CEO of Auburn Hills automotive hinge manufacturer Lucerne International, developed a plan, and quickly, after the parts Lucerne produces found themselves on the administration's tariffs list in April. Lucerne manufactures its hinges at plants in China, and Buchzeiger said the tariffs would put her company out of business, as there were no manufacturers with capacity to meet her demand in the U.S.

"I turned my entire conference room into a war room," Buchzeiger said. "I've never faced anything like this before, but I figured I was well-connected. So I called all of the organizations I was involved with, called our representatives and senators, consulted our attorneys and hired a public relations firm."

Buchzeiger launched a media blitz, publishing op-eds in several publications including Crain's Detroit Business, before testifying in front of members from the U.S. Trade Representative's office in Washington D.C. in May.

She was ultimately successful in getting her products removed from the tariff list.

"The execution our administration is taking (on trade), for lack of a better word, is asinine," Buchzeiger said. "It's destroying U.S. companies left and right."

Ann Arbor-based custom home builder Meadowlark Design + Build is losing 1 percent of its profits because of rising softwood lumber costs, said Doug Selby, CEO, and it's unable to use alternative materials like concrete and metal because, ultimately, they still cost much more than lumber.

The U.S. put a 24 percent tariff last year on softwood lumber imports from Canada, largely supported by U.S. lumber producers in southern states who argue the Canadian government unfairly subsidizes its lumber to keep prices low. However, most lumber used in homebuilding in states like Michigan historically comes from Canada. Prices have risen nearly 30 percent in the past 18 months, Selby said.

"As prices go up, it makes it harder to sell products because it ultimately costs the customers more," Selby said. "I haven't found a way to accurately pass on the costs that change between bid and construction of a home. We've thought about putting in a caveat to our contract to cover rising prices, but most people are stretching their budget to (build a home) anyway, so we're absorbing the costs, and it hurts."

Alpha is left developing a strategy to combat rising costs, which may include temporary price increases or a contractual provision allowing it to pass those costs through to its customers, Lawrence said.

"The (customers) will have to figure out how these costs will be absorbed through their supply base," he said. "Ultimately, that means the consumer will pay it."

With current new-vehicle prices averaging about $32,000, the 25 percent tariff on steel imports alone would increase car prices by about $4,000 to $5,000 per vehicle, predicts Jeff Schuster, senior vice president of forecasting at Troy-based LMC Automotive.

"When these tariffs were first announced, there was no regard for industries other than steel," Lawrence said. "It makes the automotive industry expendable, feeling like pawns in a strategy there's no end to."

Tariff success story

But for Michigan Solar & Wind Power Solutions Inc., the trade war could boost profits.

The Commerce Township-based solar energy installer is expected to see a boost in commercial projects thanks to increased domestic manufacturing that results in lower prices for U.S.-manufactured solar panels.

"The industry hasn't been impacted nearly as bad as we, or they, thought," said President Mark Hagerty. "Since the tariffs were announced, we've seen solar installations go up, and we're set to see prices drop by 30 percent in the next year."

Michigan Solar may be a minority in praising the effects of tariffs — the administration imposed a tariff on solar cells and modules at 30 percent in 2018 before dropping to 25 percent in 2019; 20 percent in 2020; and 15 percent in its final year, 2021. The first 2.5 gigawatts of imported solar cells from a country are exempt from the tariff each year.

U.S. solar manufacturers applauded those tariffs, claiming they face unfair competition from foreign producers. But installers, like Michigan Solar, which represent the vast majority of solar industry employment, cried foul.

But Michigan Solar, which employs 20 and expected to generate $2 million in revenue in 2018, uses only domestically manufactured products, so increased U.S. production would lower its costs, Hagerty said.

'Isn't going to end well'

"When trade policies are put in place, it's dangerous to just change them without a lot of planning," Lawrence said. "There's been a lot of investment made to support international trade and to change that as a tactic like this is going to do a lot of at least short-term damage. And for what? We just don't know."

Buchzeiger believes the administration's view of trade is going to cripple many industries in the U.S., including automotive, if it continues using tariffs as a battering ram against unfair practices.

"This isn't going to end well," she said. "I think this is going to send us into a full-on recession sooner than later at a time when we're all trying to stay on top of our leadership position in manufacturing. ... If you're in Michigan, hold on to your ass."